EUR/JPY Elliott Wave Analysis
By actionfx
EUR/JPY – 132.77
EUR/JPY: Wave 2 correction from 139.26 has possibly ended at 126.95
The strong rebound from 127.32 has retained our preferred count that the triple threes wave 2 from 139.26 has possibly ended at 126.95 and indicated upside target at 131.00 has been met without much difficulty and price did break above indicated resistance at 131.60/70, confirming the retreat from 134.54 has ended, then headway towards resistance at 134.54 is under way.
The wave 2 from 139.26 was a triple threes,. abc-x-abc-x-abc, and is labeled as: first set of a-b-c ended at 127.00, then x wave at 138.72, followed by second set of a-b-c at 129.02, then another x wave at 138.49 with the third set of a-b-c marked as: a-131.01, b-135.75 and the c leg as well as entire wave 2 ended at 126.95.
Our preferred count remains that the upmove from 112.08 is wave 1 of C has ended at 139.26 with minor wave iii ended at 137.42, followed by triangle wave iv at 126.98, then the move from there to 127.00 is wave 2 with the latest break-down indicated above and consolidation with upside bias remains for another test of 134.54 and possibly to 135.00. Looking ahead, only breach of 135.76-136.00 resistance area would add credence to this count and signal wave 2 has indeed ended at 126.95, then headway to 137.00 and later test of resistance at 138.49 would follow.
On the downside, whilst pullback to 131.00 cannot be ruled out, renewed buying interest should emerge around 130.00 and bring such a rise. A daily close below 129.00 would prolong choppy trading but support at 127.32 should hold and bring another rebound in January 2010.
To re-cap the corrective upmove from the record low of 88.93 (18 Oct 2000), the wave A from there is subdivided as: 1:88.93-113.72, 2:99.88 (1 Jun 2001), 3:140.91 (30 May 2003), 4:124.17 (10 Nov 2003) and 5 was ended at record high of 169.97 (21 Jul 2008). The brief but sharp selloff to 112.08 is viewed as a-b-c x a-b-c type of correction in wave B. The subsequent rally from 112.08 showed impulsive structure, therefore, we labeled it as wave 1 of C.
The long-term downtrend started from calculated price of 359.26 (Dec 1979). The sharp fall from there to 226.60 (Aug 1981) with impulsive structure is labeled as wave I and wave II was capped at 256.59 (Nov 1982). Wave III decline was contained at 140.58 (Feb 1989), the subsequent rebound to 198.59 (Aug 1990) is seen as wave IV, the subsequent 5-wavers decline from there finished at 88.93 (18 Oct 2000). The strong rebound from there to 169.97 (21 Jul 2008) is tentatively viewed as wave A and wave B selloff was followed and is possibly ended at 112.08 (21 Jan 2009). Our alternate count is that entire wave IV correction already ended at 169.97, hence fall to 112.08 would be treated as the wave 1 of V.
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